A
recent global Gartner survey* revealed that 75 percent of end-user
organizations would be willing to pay more for 5G mobile capabilities
(see Figure 1). Only 24 percent of the survey's respondents would be
unwilling to pay more for 5G than for 4G.

"Those in the telecom industry are more likely to be prepared to pay
more than those in other industries," said Sylvain Fabre, research
director at Gartner. "End-user organisations in the manufacturing,
services and government sectors, for example, are less likely to be
willing to pay a premium for 5G than telecom companies, which are
willing to pay a 5G premium for their internal use."

Figure 1: How Much More Are End-User Organisations Willing to Pay for 5G
Capabilities?

Source: Gartner (August 2017)

In addition to offering better prices for industries in which users are
less convinced of the business benefits of 5G, communications service
providers (CSPs) must create value propositions that entice customers to
start 5G migration projects sooner.

Although most of the respondents think their organizations would be
prepared to pay more for 5G, few (8 percent) expect 5G to deliver cost
savings or increase revenues. 5G is seen principally as a network
evolution (59 percent), and only secondarily as an enabler of digital
business (37 percent). The survey also found that respondents from the
telecom sector are less persuaded than those in other industries that 5G
will be a revenue enhancer. "They tend to see 5G migration as a matter
of gradual and inevitable infrastructural change, rather than as an
opportunity to generate new revenue," said Mr. Fabre.

Internet of Things Communication as the No. 1 Use Case for 5G

The survey found that almost half the respondents intend to use 5G to
access videos and fixed wireless capabilities. More interestingly,
though, the majority respondents (57 percent) believe that their
organizationís main intention is to use 5G to drive Internet of Things
(IoT) communication.

"This finding is surprising, as the number of deployed 'things' that
need cellular connectivity won't exceed the capacity of existing
cellular IoT technologies before 2023 in most regions," said Mr. Fabre.
"And even once fully implemented, 5G will suit only a narrow subset of
IoT use cases that require a combination of very high data rates and
very low latency. In addition, 5G won't be ready to support massive
machine-type communications, or ultra-reliable and low-latency
communications, until early 2020." This finding may also be a sign of
confusion about 5G's applicability, as many proven and less expensive
alternatives already exist for wireless IoT connectivity ó use of Wi-Fi,
ZigBee or Bluetooth, for example, would avoid the cost and complexity
associated with cellular communications.

A
degree of misunderstanding is probably also apparent in the expressed
belief by a large majority of the respondents (84 percent) that 5G will
be widely available by 2020. By contrast, CSPs' plans indicate that wide
availability may not be achieved before 2022.

Gartner predicts that, by 2020, only 3 percentof the world's
network-owning mobile CSPs will have launched 5G networks commercially.
"Although standards-compliant commercial network equipment could be
available by 2019, commercial rollouts of 5G networks and services by
CSPs before 2019 are likely to use prestandard equipment," added Mr.
Fabre.

CSPs' marketing organizations need realistic roadmaps for 5G coverage
and typical performance, so that they communicate with customers
accurately. They also need to publish clear 5G rollout plans for the
years 2019 to 2021 to help innovators understand when and where 5G will
be available for IoT applications.